How Will Low-Income Kids Benefit under House and Senate Bills?

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Abstract

In July 2007, bills to reauthorize the State Children’s Health Insurance Program were passed in both the House and the Senate. One question that has been raised is how well the bills target low-income children. In this brief, Genevieve Kenney and colleagues estimate that the proportion of children below 200 percent of the Federal Poverty Level (FPL) covered by the bills is 70% or higher. The share of uninsured children below 200 percent of the FPL who would gain coverage is estimated to be even higher (78 to 85 percent).

Update 11.08.07: Urban Institute analysis of the income distribution of the children who would benefit under the Children's Health Insurance Program Reauthorization Act of 2007 (H.R. 3963, passed by the House on October 25 and the Senate on November 1) found that the bill was targeted at low-income children, as were the prior SCHIP reauthorization bills (see http://www.urban.org/url.cfm?ID=411545). Under H.R. 3963, approximately 73 percent of the children projected to gain or retain coverage have family incomes below 200 percent of the federal poverty level (FPL) and about 80 percent of the uninsured children projected to gain coverage have incomes below 200 percent of the FPL. More than 48 percent of the 3.9 million uninsured children projected to gain coverage under H.R. 3963 would be covered under Medicaid, which means that many of the low-income children who would benefit under the bill have family incomes below the federal poverty level. Very few children targeted by the bill have incomes above 300 percent of the FPL because only New Jersey has eligibility thresholds above that level and because the proposed legislation would not allow any other states to receive federal funding to cover children above that level.

Update 10.04.07: Urban Institute analysis of the income distribution of the children who would benefit under the Children's Health Insurance Program Reauthorization Act of 2007 (H.R. 976, passed by both houses of Congress in September) found very similar estimates as those done for the Senate’s SCHIP reauthorization bill (see http://www.urban.org/url.cfm?ID=411545). Under H.R. 976, approximately 70 percent of the children projected to gain or retain coverage have family incomes below 200 percent of the federal poverty level (FPL) and over 75 percent of the uninsured children projected to gain coverage have incomes below 200 percent of the FPL. More than 40 percent of the 3.8 million uninsured children projected to gain coverage under H.R. 976 would be covered under Medicaid, which means that many of the low-income children who would benefit under the bill have family incomes below the federal poverty level. Very few children targeted by the bill have incomes above 300 percent of the FPL because few states have or are projected to have eligibility thresholds above that level and because the proposed legislation would reduce federal support for that coverage.

Introduction

Approximately 70 percent of children who are projected to benefit from both the Senate and House bills to reauthorize the State Children’s Health Insurance Program (SCHIP) have incomes below 200 percent of the Federal Poverty Level (FPL). An even higher share (between 78 and 85 percent) of the 4 to 5 million uninsured children who stand to gain coverage under the bills have incomes below 200 percent of the FPL. And because both bills include coverage for millions of additional Medicaid-eligible children, a substantial number of the children who are targeted by these bills have incomes below 100 percent of the FPL. Overall, very few of the children targeted under both bills have incomes above 300 percent of the FPL because so few states currently have or are projected to have eligibility thresholds above 300 percent of the FPL1,2. Moreover, not only is the distribution of new coverage skewed toward lowerincome children, the distribution of public funds is even more skewed in that direction because premium payments are required for most families with incomes above 200 percent of the FPL in order to enroll in coverage3.

1 Mann, C. and Odeh, M.“Moving Backward: New Federally Imposed Limits on States’Ability to Cover Children.” Georgetown Center for Children and Families. 30 Aug 2007.2 In addition, very few states have indicated that they plan to expand beyond 300 percent of the FPL. In August 2007,The Center for Medicare and Medicaid Services released a new directive regarding coverage of children above 250 percent of the FPL and subsequently rejected New York’s State Plan Amendment to expand its SCHIP program to 400 percent of the FPL. (Weems, K. Letter from CMS to Judith Arnold, Director, Division of Coverage and Enrollment, Office of Health Insurance Programs, State of New York Department of Health. 7 Sept 2007).3 Kenney,G.“The Children’s Health Insurance Program in Action: A State’s Perspective on SCHIP.”Testimony to the Senate Committee on Finance. 4 Apr 2007.

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